SPEECH BY LADY THATCHER AT THE INTERNATIONAL FREE ENTERPRISE DINNER ON 20TH APRIL 1999

Introduction

Chairman, my Lords, Ladies and Gentleman.

Thank you, [ William Hague] William, for the kind and generous things you've said about me. I'm truly flattered. But I'm also inclined to adopt the well known words >of President Lyndon Johnson. After just such a glowing introduction, LBJ replied: "That was great. My father would have enjoyed it... and my mother might have believed it".

William: there are always difficult days in Opposition - don't I know. But remember: every Conservative leader this century has gone on to be Prime Minister.

I would also like to thank the organisers for inviting me to address this dinner to mark the twentieth anniversary of my becoming Prime Minister.

It is an honour and a pleasure; though as anniversaries go, this is unusual. Denis Thatcher] Denis and I have celebrated 47 anniversaries, and so far he's not once asked me to make a speech. In fact, he's positively discouraged it.

Politicians, though, are used to singing for their supper. And having glanced at the ticket prices for this evening, I now grasp the wider application of Milton Friedman's well-known dictum that "there's no such thing as a free lunch." But, in any case, it's all in several good causes!

Speaking of Denis, I could never have made it to the top of politics without him, let alone gone on...and on...and on.

But Denis was always direct. When I first told him I intended to seek the Party leadership he said: "Good Lord! You must be mad, but I'll support you all the way". I suspect that Ted Heath, who's done us the great honour of being here tonight, would agree with at least half that statement.

I would like to take this opportunity publicly to pay tribute to Ted as one of Britain's most forceful and effective Prime Ministers. Go back and read his 1970 manifesto: it's one of the boldest and best the Conservative Party ever produced - a document not for burning.

Britain Twenty Years On

If a week is a long time in politics, how very long twenty years must be!

Today the word "globalisation" is all the rage. Twenty years ago it was still nationalisation.

Today our British industries are in private hands - efficient, productive, competitive, generating billions for the Exchequer for use on public services. Twenty years ago, our companies were impeded by militancy and restrictive practices, our management was complacent, our workforce unproductive. And state owned firms ate up, through subsidies, what should have gone to schools and hospitals.

Today Britain has the strongest economy, the soundest finances and the lowest taxation in Europe. Twenty years ago, this country was in economic decline, barely out of IMF tutelage for its swollen debts, and impoverished by tax rates that drove our most creative minds abroad.

I might like to tell you that the person responsible for this transformation was one Margaret Hilda Thatcher. But I'm not even tempted to do so. All that we in that government did was to create the right framework: it was the British people who did the rest.

Commentators sometimes talk as if the policies that turned Britain from the sick man of Europe to the model for Europe - indeed for more than Europe - were based on an economic formula. And I willingly grant the influence of free market economists, like Friedrich Hayek and Milton Friedman. But the root of the approach we pursued in the 1980s lay deep in human nature, and more especially the nature of the British people. If you really believe, as a matter of passionate conviction, in the talents and character of your nation, of course you want to set it free. And we British have a true vocation for liberty - all our history proves it.

But it took time to turn things round. Socialism was deeply embedded, not just into institutions but into minds, where it's always far more dangerous. Rab Butler once famously described politics as the art of the possible. But sometimes people convince themselves that nothing is really possible, and that's when the socialists see their chance.

You can easily understand why.

After all, if it was really impossible to curb inflation without state controls on prices, dividends and wages, then all the key decisions in economic life were bound to be taken by the state. But the doomsters were wrong. We proved it. We abolished those controls on people's freedom, and controlled the money supply instead.

If it was really impossible to have a strong currency and stable economy without exchange controls, then that bureaucratic thicket was bound to become a jungle. But the faint-hearts were wrong. We proved it. Within six months we abolished the exchange controls that had been in place for forty years. As a result, Britain built up a huge portfolio of overseas investment. And now globalised capital markets are the basis of our whole economic system.

If it was really impossible to prevent strikes and increase productivity without appeasing the trade union bosses, then their demands for more socialism had to be met. But there was another way. We proved it. We refused to print money to finance crazy wage demands, we cut the legal privileges which had been used to bully workers and employers alike, and we faced down a violent year-long strike. And nobody now dares argue we were wrong.

So while the first two years or so were difficult, the great majority of the British people were soon persuaded that our approach was right. I don't mean they always liked it - or us. But that wasn't a problem, and should never be for Conservatives, because we earned something much more important - we earned their respect. And it won us four elections.

The last people of all to accept our message were, of course, our political opponents.

But I've always found this most convenient of conversions a teeny bit suspect.

After all, if you go into politics, as the socialists did, because you believe that big government is the answer, how can you now agree that big government is the problem?

In truth, of course, their blinding revelation that capitalism worked was based not on what Labour's leaders believed, but on what they found their supporters believed.

Of course, the cynic will question whether motives really matter anyway. But they do - because in government the unexpected happens, and when it does, the man without his own political compass goes astray.

The result is a muddle in the middle.

Take, for example, the so-called Third Way. Now, either you believe in capitalism, or you believe in socialism. Capitalism, as we know, creates wealth. Socialism, as we also know, creates poverty. So what is the argument for a third way, equidistant between wealth and poverty, success and failure, freedom and slavery? In fact, there's only one. This silly catch phrase demonstrates that our new masters still can't admit that everything they and their forbears stood for was utterly, and catastrophically, wrong.

It shows in other ways as well. They still believe in a bossy state that tells you which schools your children should go to, how much homework they must do, and even when they ought to go to bed. But, of course, we're all just children in the eyes of this government.

Beef on the bone....Benson and Hedges.... Duty free....They're all endangered.

Just what have these people got against my husband?

My old friend Ronald Reagan put the point succinctly years ago, when he described the nine most dangerous words in the English language as: "I'm from the government, and I want to help".

All this muddled thinking is reflected in misguided policy - not least economic policy.

For it's easy enough to talk the language of enterprise. But it's much more difficult to create the conditions for it.

It's fine to talk about controlling spending and boosting incentives. But raising £40 billion of extra taxation by stealth, as Gordon Brown is planning, is evidence that behind the New Labour mask, Old Socialism smirks.

It's easy enough to take credit for the low unemployment your Conservative predecessors bequeathed you. But proving your Left wing credentials with a National Minimum Wage, with a Working Time Directive, and with compulsory trade union recognition is to take a three-fold swipe at job creation.

In any case, let's not get too enthusiastic about the fact that today's Labour government has learned some of the lessons from twenty years ago. What would really stir my admiration would be to find them wanting to go further in the right - and I mean the Right - direction now.

If they accept that small government and low taxes are important, why not give back to the British people more of their own money and bring down public spending and regulation to American levels? For that's the way to American prosperity.

Let us be clear. It's not that Britain today isn't doing well: it is. Our complaint is that, given the changes we Conservatives made in the eighties, and given the enormous advantages our country now enjoys, we should be doing so much better.

Just consider:

We have the most efficient international companies in Europe.

We have the most affordable and soundly based pensions system in Europe.

And in spite of the Government's Gadarene rush to monetary union, the fact that we still have our own currency protects us from the economic shocks, unemployment and instability that are the lot of Europe.

Moreover, Britain enjoys another advantage, namely that we're not just European. We are part of the Anglo-Saxon world, whose language alone is global, whose democratic institutions alone have proved enduring, and whose leader, America, alone can claim to be a superpower.

The freedom we take for granted today was created and upheld by the English speaking peoples.

These are the real, practical advantages that come from our history - a great history - and one that doesn't need "re-branding".

No End to Conflicts

The painful paradox is that we conservatives, here and abroad, have won the arguments but lost power. Our very success has made us seem dispensable. In the post-Cold War era there's a premium on soft focus and the soft left, because the illusion persists that all the important battles have already been won.

They haven't. Just look around you. The world today is more dangerous than ever. Rogue states are more difficult to control. Islamic militancy threatens terrorism and instability. Proliferation of missiles and weapons of mass destruction makes our forces, and increasingly our cities, vulnerable to attack. Russia remains a mighty nuclear power, while sinking into chaos with Communists and other extremists closing in. China grows rapidly richer, but remains both oppressive and aggressive. These are mighty challenges that require the very strongest nerves.

They also require continual investment in the latest military technology, and the will to use it. Since the Cold War ended, Western countries, including Britain, have run down their defences too far. That must be reversed. Our leaders have forgotten that the only true peace dividend is peace itself.

Indeed, this so-called New World Order has become more like an Old World Nightmare. We've expanded the role of international intervention, but we haven't faced up to the strain it puts on national defences. We've seen too much attention given to snap opinion polls, too little to the brutal realities of power. We've had too much fruitless diplomacy, too many conferences and communiques, too many slogans about human rights - and too little recognition of the depths of human evil.

The Crisis in Kosovo

Which brings me to the crisis in Kosovo that is in all our thoughts this evening.

Last September I went to Vukovar, a city destroyed and its inhabitants butchered by the soldiers of Slobodan Milosevic. The place still smells of death, the widows weep, and the ruins gape. Around Srebrenica, where neither I nor many other Westerners have gone, the bodies of thousands of slaughtered victims still lie in unmarked graves. In Kosovo, we can only imagine what depravities of human wickedness, what depths of human degradation, those endless columns of refugees have fled. Mass rape, mass graves, death camps, historic communities wiped out by ethnic cleansing - these are the monuments to Milosevic's triumphs.

They are also, let's remember and admit, the result of eight long years of Western weakness. When will they ever learn?

Appeasement has failed in the 1990s, as it failed in the 1930s. Then, there were always politicians to argue that the madness of Nazism could be contained and that a reckoning could somehow be avoided. In our own day too there has never been a lack of politicians and diplomats willing to collaborate with Milosevic's Serbia. At each stage, both in the thirties and in the nineties, the tyrant carefully laid his snares, and na´ve negotiators obligingly fell into them.

For eight years I have called for Serbia to be stopped. Even after the massacre of Srebrenica I was told that my calls for military action were mere "emotional nonsense", words which, I think, only a man could have uttered.

But there were also good reasons for taking action early. The West could have stopped Milosevic in Slovenia or Croatia in 1991, or in Bosnia in 1992. But instead we deprived his opponents of the means to arm themselves, thus allowing his aggression to prosper.

Even in 1995, when at last a combination of airstrikes and well-armed Croat and Muslim ground forces broke the power of the Bosnian Serb aggressors, we intervened to halt their advance onto Banja Luka, and so avoid anything that might threaten Milosevic. Even then, Western political leaders believed that the butcher of Belgrade could be a force for stability. So here we are now, fighting a war eight years too late, on treacherous terrain, so far without much effective local support, with imperfect intelligence, and with war aims that some find unclear and unpersuasive.

But with all that said - and it must be said, so that the lessons are well and truly learned - let there be no doubt: this is a war that must be won.

I understand the unease that many feel about the way in which this operation began. But those who agonise over whether what is happening in Kosovo today is really of sufficient importance to justify our military intervention, gravely underestimate the consequences of doing nothing. There is always method in Milosevic's madness. He is a master at using human tides of refugees to destabilise his neighbours and weaken his opponents. And that we simply cannot now allow. The surrounding countries just can't absorb two million Albanian refugees without provoking a new spiral of violent disintegration, possibly involving Nato members.

But the over-riding justification for military action is quite simply the nature of the enemy we face. We are not dealing with some minor thug whose local brutalities may offend our sensibilities from time to time. Milosevic's regime and the genocidal ideology that sustains it represent something altogether different - a truly monstrous evil; one which cannot with safety be merely checked or contained; one which must be totally defeated and be seen by the Serbs themselves to be defeated.

When that has been done, we need to learn the lessons of what has happened and of the warnings that were given but ignored. But this is not the time. There has already been too much media speculation about targets and tactics, and some shameful and demoralising commentary which can only help the enemy. So I shall say nothing of detailed tactics here tonight.

But two things more I must say.

First, about our fundamental aims. It would be both cruel and stupid to expect the Albanian Kosovans now to return to live under any form of Serbian rule. Kosovo must be given independence, initially under international protection. And there must be no partition, a plan that predictable siren voices are already advancing. Partition would only serve to reward violence and ethnic cleansing. It would be to concede defeat. And I am unmoved by Serb pleas to retain their grasp on most of Kosovo because it contains their holy places. Coming from those who systematically levelled Catholic churches and Muslim mosques wherever they went, such an argument is cynical almost to the point of blasphemy.

Second, about the general conduct of the war. There are, in the end, no humanitarian wars. War is serious and it is deadly. In wars risk is inevitable and casualties, including alas civilian casualties, are to be expected. Trying to fight a war with one hand tied behind your back is the way to lose it. We always regret the loss of lives. But we should have no doubt that it is not our troops or pilots, but the men of evil, who bear the guilt.

The goal of war is victory. And the only victory worth having now is one that prevents Serbia ever again having the means to attack its neighbours and terrorise its non-Serb inhabitants. That will require the destruction of Serbia's political will, the destruction of its war machine and all the infrastructure on which these depend. We must be prepared to cope with all the changing demands of war - including, if that is what is required, the deployment of ground troops. And we must expect a long haul until the job is done.

I believe that the British people will want to see this through - they know our cause is just. A sense of justice is indeed the defining quality in the British character. And the British are instinctively outraged by injustice.

You know, there's a vindictive streak to Socialism that seems to be indelible.

You have to be dishonourable to behave, as this government has with Senator Pinochet, an old friend of Britain who proved himself in our hour of need.

You have to be vindictive to seize him at midnight on his bed of pain, to hold him for six whole days on a warrant you know to be unlawful, and then to collude with a Spanish prosecutor and with Chilean communists to bring trumped up charges after the original case has all but collapsed. And after that you have to be brazen to proclaim your open-mindedness.

This is a cautionary tale of Socialist justice that concerns every man and woman in Britain, whose rights are guaranteed by our laws and those solemnly entrusted with upholding them.

Whatever ultimately happens in this shabby business, it has revealed the true face of Labour, and it is easily recognisable from years gone by.

True enough, the Marxist jargon has been replaced by soothing language honed in focus groups.

Granted, the donkey jackets have given way to smart Armani suits.

Admittedly, pioneering holidays in Socialist communes have yielded their place to trendy Tuscan villa-breaks.

But the old Left wing rancour and prejudice burn bright within.

In understanding this, we also understand at once why so much of what makes up the British way of life is being eroded by this Labour Government

why the morale of our police is being systematically destroyed;

why our Parliament is being sidelined;

why our currency is threatened;

why Irish terrorist murderers are flooding out of jail.

New Labour politicians hate so much that Britain stands for, as the Old Left did: it's just that they are better actors.

The qualities that made Britain what she is haven't changed. Decency, fair play, honest dealing, respect for the rights of others - even the rights of people you dislike, especially the rights of people who are vulnerable - these are the things that made us the most remarkable nation on earth.

How well Rudyard Kipling expressed this thought in the words of warning by the Norman Baron to his son about the stubborn English:

[And I finish with this]

"My son," said the Norman Baron, "I am dying, and you will be heir

To all the broad acres in England that William gave me for my share

When we conquered the Saxons at Hastings, and a nice little handful it is.

But before you go over to rule it I want you to understand this:

The Saxon is not like us Normans. His manners are not so polite.

But he never means anything serious till he talks about justice and right.

When he stands like an ox in the furrow with his sullen set eyes on your own,